California State Lottery

California State Lottery
Agency overview
Key document	(etc.)
Website
www.CAlottery.com

A pair of the California Lottery's original tickets, purchased October 3, 1985 that are unscratched

The California State Lottery, also known as the California Lottery, began on November 6, 1984, after California voters passed Proposition 37, the California State Lottery Act of 1984, authorizing the creation of a lottery. The first tickets were purchased on October 3, 1985.

The minimum age to purchase or redeem California Lottery tickets is 18.

Lottery Act

The California State Lottery Act of 1984 was intended to provide more money to schools without imposing extra taxes. Accordingly, the Lottery was required to provide at least 34% of its revenues to public education, supplementing (not replacing) other funds provided by California. Another 50% of its revenues must be paid to the public in the form of prizes, making a mandated minimum of 84% of all funds that must be given back to the public in the form of prizes or funds for public education. The remainder, a maximum of 16%, was to be spent on administration, such as salaries and running the games.

On April 8, 2010, Governor Schwarzenegger signed into law Assembly Bill 142 (Hayashi, D-Hayward).^[1] Amending the Lottery Act, this bill reallocates Lottery revenues "so as to maximize the amount of funding allocated to public education." As an urgency statute, this bill took effect immediately. The new allocation increased to at least 87% the portion of Lottery revenue returned to the public, and correspondingly decreased to a maximum of 13% the amount spent on administration. It then specified that "not less than 50% of the total annual Lottery revenues, in an amount to be determined by the commission, be returned to the public in the form of prizes." This leaves "the commission to establish the percentage to be allocated to the benefit of public education at a level that maximizes the total net revenues allocated to the benefit of public education." It also imposed requirements "to ensure continued growth in Lottery net revenues allocated to public education", with annual procedures that would, "in any one of the first 5 full fiscal years after the enactment of this measure, ... provide for the repeal of the changes made by this measure on the following January 1, and the prior law to be restored", if those requirements were not then met.^[2][3] This bill follows the practice of "other large state lottery systems, including Texas, North Carolina, and Florida, which have shown an increase in revenue through similar changes."^[4]

The Lottery Act mandates a five-member commission, appointed by the governor, to "oversee the Lottery and the Director" and make quarterly reports "to the Governor, the Attorney General, the Controller, the Treasurer, and the Legislature." Annually the commission selects a chairperson. Regular meetings of the commission are held at least quarterly and are open to the public.^[5]

The Lottery uses a pari-mutuel system to determine the size of each prize, such that prize values are not fixed, but depend on sales and the number of winning tickets. The Lottery does set fixed prize levels for its Hot Spot game (see below.)

History

The California State Lottery began on November 6, 1984, when a majority (58%) of California voters passed Proposition 37, the California State Lottery Act of 1984, authorizing the creation of a lottery.^[6] On January 29, 1985, Gov. George Deukmejian appointed the first Lottery commissioners: William Johnston, Laverta Montgomery, John Price, Howard Varner, and Kennard Webster.^[7] Deukmejian appointed the first director, Mark Michalko, formerly Ohio Lottery legal counsel, in May 1985.^[8][9][10] The first lottery games were Scratchers; sales began on October 3, 1985. A weekly Lotto game began on October 14, 1986.^[6]

California joined Mega Millions on June 22, 2005, becoming the 12th jurisdiction to join the game. A Mega Millions drawing was held in Hollywood to commemorate the event.

California, while initially never desiring to offer Mega Millions's rival Powerball, was briefly a member of the Multi-State Lottery Association (MUSL) because an "international" lottery game that would have included a number of US lotteries was planned; however, the game never came to fruition.

Games

These are the current games of the California Lottery.

Draw games

In these games, players purchase tickets in advance, and winners are chosen by random number generator (except for Mega Millions and Super Lotto Plus) at specified draw times.

Daily 3

Playing Daily 3 involves picking three digits 0 through 9 and a playstyle. Bettors can choose Quick Pick to have the numbers picked randomly by computer. The playstyle choices are straight (this is the default if the player doesn't choose one), box, or straight/box.^[11] The game costs $1 per play, per draw, and the Advance Play option allows up to 14 consecutive draws. There are two draws every day, televised at 1:29pm and 6:59pm.^[12]

Daily 4

A "pick 4" type game premiered on May 19, 2008. Each play costs $1 and drawings are held once per day. Playstyles, like the Daily 3, offer the straight, box, and straight/box option.

Daily Derby

Daily Derby is a mock horse racing game. Players choose three horses, one each to finish first (win), second (place) and third (show); players also choose a race time from 1:40:00 to 1:49:99, by marking the last three digits of the time on the playslip. Alternately, players can select Quick Pick to have the computer choose the horses, the race time, or both. Daily Derby also offers Advance Play for up to 14 consecutive draws. The game costs $2 per play, per draw; held daily at 6:35pm and televised at 6:59pm.^[13]

Fantasy 5

Fantasy 5 players choose five numbers from 1 through 39. A ticket includes up to five sets of numbers; they can be played up to 12 drawings. Games cost $1 per play. Fantasy 5 is drawn evenings at 6:35pm and televised at 6:59pm. Jackpots begin at $50,000.

A player who bought a $5 Fantasy 5 ticket used to get a coupon to mail in for a "second-chance" drawing to be on the "Make Me A Millionaire" show. That drawing was cancelled in July 2010 and now players receive a "second-chance" coupon with a twenty digit code. Players can enter those codes at www.calottery.com/fan5 to be entered into a weekly drawing for a cash prize ranging from $1,000 to $10,000.^[14]

SuperLotto Plus

SuperLotto Plus is a California-only game played in the style of Mega Millions every Wednesday and Saturday. Five numbers are selected from a set of 47 balls, as is a "Mega number". which is chosen from a separate set of 27 balls. The minimum jackpot prize is $7 million.

California has historically offered a number of jackpot-style games, beginning with the "6-49" game in 1986, which was changed at various times to a 53-number game (in 1990), which included a seventh, "bonus" number, then to a 51-number game that lasted until 2000. The current 47/27 variant began in 2000 under the name SuperLotto Plus.

On February 16, 2002, the California Lottery's then-highest payout of $193 million was won by three tickets.

Of California's draw games, only Mega Millions (drawn in Atlanta) and SuperLotto Plus use "traditional" drawing mechanisms; the other games use a random number generator.

Mega Millions

Main article: Mega Millions

In 2004, Gov. Arnold Schwarzenegger, as part of his redesign of California government, suggested that California join a multi-jurisdictional lottery. In June 2005, the Lottery Commission voted to join Mega Millions.^[15]

California is unique among the Mega Millions participants in that all nine prize levels for Mega Millions within its borders are always parimutuel, rather than each non-jackpot prize having a set value. This leads to different prize amounts for equivalent winners sold in California when compared to those sold in other participating states. E.g., the normal second prize in the other Mega Millions jurisdictions is $250,000; it is not unheard of for that prize level to pay over $1 million to a California Mega Millions winner. The second prize pool within California frequently rolls; it is, in effect, a "secondary jackpot". Unlike most Mega Millions members, California currently does not offer the Megaplier, which is drawn in Texas by random number generator.

Hot Spot

Hot Spot is a quick-draw keno style game. The game was updated on August 1st, 2011 to allow players to choose to play any amount of "spots" from 1 through 10 from a pool of numbers from 01 through 80. A new higher top prize of $100,000 was also offered for 10 spot play. Previously, players could only choose to play 2, 3, 4, 5 or 8 spots. Wagering can be either $1, $2, $3, $4, $5, $10, or $20, for a maximum of 100 consecutive draws. In addition, players can choose a Bulls-Eye wager for each draw, hoping to hit the 1 number out of the 20 numbers drawn that is selected as the bulls-eye number. Drawings occur every day and every four minutes from 6:04 am until 2:00 am. Lottery retailers have monitors that display Hot Spot drawings and recent results from other Lottery games.^[16]

Scratchers

California sells scratch cards under the branding "Scratchers". The prizes are smaller than other lottery games, but there are better odds (averaging 1:5). There are dozens of Scratchers games on sale at any time, and the selection of games changes frequently. Winners must be claimed within 180 days of the announced end-of-game date.^[17][18] Scratchers range in price from $1 to $10.

Former games

Draw games

Decco: Played in a similar fashion as most US "pick-4" drawing games, except players had to match one playing card (2 through Ace) in each of the four suits.

Topper: Each SuperLotto Plus ticket automatically was printed with the names of three of California's 100 then-most-populous-cities (e.g. Los Angeles, San Diego, Sacramento). If the player wagered an additional $1, they were eligible to win up to $25,000 in the Topper drawing, which was drawn by random number generator.

TV game shows

The California Lottery has had two TV game shows.

The Big Spin

The Big Spin, the California Lottery's first game show, broadcast its final episode on January 10, 2009, ending its run as the longest-running lottery game show in the US.^[19] The Lottery had several methods for choosing contestants, including prizes in Scratchers games and "second-chance" drawings from other games. The top prize was fixed at $3 million; the minimum guaranteed prize was $1,750. While Big Spin Scratchers remained in circulation in 2009, winners who would previously have spun the wheel on The Big Spin had the option to spin the wheel--untelevised--as an alternative to going to the Make Me a Millionaire show, which succeeded The Big Spin.

Make Me a Millionaire

Make Me a Millionaire, the California Lottery's second TV game show, debuted on January 17, 2009 for an initial four-year run with host Mark L. Walberg and co-presenter Liz Hernandez.^[19] On May 4, 2010, the California Lottery announced the show's cancellation due to poor ratings, with the last program telecast on July 3, 2010. The show will not be replaced; money that was allocated for its production will be used for prizes for the Lottery's Scratchers games.

Players qualified for the Make Me a Millionaire show by winning in the "Make Me a Millionaire" Scratchers game, or by a Fantasy 5 second-chance drawing; when the show began, winners from "Big Spin" Scratchers also qualified.^[20] After the TV show was canceled, winners of the "Make Me a Millionaire" Scratchers games, which were sold until June 25, 2010, had until December 22, 2010 to claim their opportunities to play and win prizes off the air.^[21] Similarly, Fantasy 5 second-chance draw coupons, which were discontinued on July 4, 2010, could be submitted by December 31, 2010.^[22] Five unaired episodes of Make Me A Millionaire were produced and made available for viewing on the Lottery's YouTube channel.^[23]

During the game play, each of the 12 contestants won at least $2,000; seven of the contestants were selected randomly to play four different games of chance with a top prize of at least $1 million. The first game, Lucky Penny, gave three players a minimum prize of $2,000 and the possibility of winning a car. The second game is Safe Cracker, in which two players competed for prizes ranging from $2,000 to $92,000. Next is California Cool, with one player and prizes ranging from $5,000 to $200,000. The last game is Millionaire, also for one player; it guaranteed $10,000 with a jackpot that began at $1 million, increasing by $200,000 each week until won.^[20]

Claiming prizes

For each prize of less than $600, players may collect from either a Lottery retailer or the Lottery itself. Prizes of $600 or more must be collected from the lottery.^[17]

Claim period

Almost all prizes must be claimed within 180 days of the draw or the announced end of the game. If the 180th day is a weekend or holiday, the final claim date is extended to the next business day. Any unclaimed prize money is transferred to the education fund in addition to the minimum 34% that the Lottery is already obligated to transfer from income.

Because many of the participant states in Mega Millions have a one-year claim period, the California legislature changed the language in the Lottery Act. On April 23, 2008 the governor signed Assembly Member Van Tran's Assembly Bill 1251, modifying California Government Code section 8880.321 to allow for a one-year claim period for a Mega Millions jackpot prize.^[15][24] This is the only prize in California that has a one-year claim period. All other prizes have the 180-day claim period. This legislation affects Mega Millions drawings after July 5, 2008.

Payment options

All prizes for Fantasy 5, Daily Derby, Daily 3, Daily 4, and non-jackpot SuperLotto Plus and Mega Millions prizes, are paid out in one payment, less between 25% and 33% (depending upon the winner's tax documentation) Federal withholding if the prize is over $5,000. Merchandise prizes over $5,000 are subject to 33% Federal withholding. Scratchers tickets are generally one-payment prizes but some games have annuity options for payments each year or even some where the prize was a certain payment per week. California does not tax California Lottery winnings, however it does tax lottery winnings from other states.^[25] For SuperLotto Plus and Mega Millions jackpots, the player may choose a single cash payout for a floating percentage of the jackpot, or a 26-yearly-payment annuity. The SuperLotto Plus annuity payment schedule is on a graduated basis (every year the payment is slightly more than the previous year, such that the 25th payment is twice as much as the first), whereas payments in the Mega Millions annuity are the same every year. Until 2005, when California joined Mega Millions, the payment choice on SuperLotto Plus had to be made when the ticket was bought. Now, like most US lotteries, there is a 60-day window after winning, in which the choice of cash or annuity is to be made.

References

1. ^ 04/08/2010 Legislative Update, Press Releases, Office of the Governor, State of California
2. ^ AB 142 (Hayashi): California State Lottery. AroundTheCapitol. Retrieved 2011-04-10.
3. ^ Bill Number: AB 142, Bill Text and Legislative Counsel's Digest, Official California Legislative Information, Legislative Counsel of California
4. ^ Governor signs Hayashi's bill to increase school funding from lottery proceeds, Jeb Bing, April 11, 2010, Pleasanton Weekly
5. ^ California State Lottery Act, California Government Code Title 2, Division 1, Chapter 12.5. Retrieved 2011-03-04.
6. ^ ^{a b} Collection Overview, Collection Number R181, Inventory of the California State Lottery Commission Records, The Online Archive of California
7. ^ Deukmejian Appoints Five to Run California's Lottery Sales Not Expected 'Til Summer, Jan. 29, 1985, Los Angeles Times, found in L.A. Times Archives
8. ^ DUKE DOWN TO 4 FINALISTS FOR LOTTERY CHIEF, April 20, 1985, Page A01, The Sacramento Bee
9. ^ Ohio Official Favored for State Lottery Director, John Hurst and Nancy Skelton, May 8, 1985, Los Angeles Times
10. ^ Mark Michalko on LinkedIn.com
11. ^ How To Play Daily 3, California State Lottery
12. ^ Televised Draw Results, California State Lottery
13. ^ How To Play Daily Derby, California State Lottery
14. ^ Make Me a Millionaire, California State Lottery
15. ^ ^{a b} Tran Bill Signed by Governor to Keep Education Dollars Flowing from State Lottery California Chronicle, April 23, 2008. Retrieved 2011-04-04.
16. ^ Draw Times & Dates California State Lottery. Retrieved 2011-04-04.
17. ^ ^{a b} Claiming Prizes, California State Lottery
18. ^ End of Game Information, California State Lottery
19. ^ ^{a b} "3 Ball takes chance on lottery game show" The Hollywood Reporter, Nielsen Business Media, Inc., January 7, 2009.
20. ^ ^{a b} "Commission Advisory, Videos of the Commission Meeting" of December 3, 2008, Agenda Item 7E, California State Lottery.
21. ^ California Lottery cancels 'Make Me a Millionaire' May 5, 2010, Sacramento Bee.]
22. ^ Lottery TV Show California State Lottery. Retrieved 2010-11-23.
23. ^ Official California Lottery YouTube Channel. Retrieved 2011-03-04.
24. ^ Assembly Bill No. 1251 Official California Legislative Information, the Legislative Counsel of California. Retrieved 2011-04-04.
25. ^ Instructions for Schedule CA (540), Page 4, Line 21, State of California Franchise Tax Board

External links

• California State Lottery Official Site